The name is absent

mobile communications equipment and the bargaining power generated from its market size,
China actively approached foreign suppliers with joint venture negotiations and technology
transfer opportunities. With the establishment of Shanghai Bell in 1984, joint ventures in
selected areas were highly encouraged. Table 1 shows the digital cellular sector listed in the
“encouraged” category in the “Government Guideline for Foreign Investment in
Telecommunications” issued by the State Council in 1995. In contrast, analogue wireless system
is listed as “restricted” while the telecommunications service sector is completely prohibited
from foreign investment. Overall, foreign investment in the mobile communications equipment
manufacturing sector was highly encouraged by the Chinese government in the mid-1990s.

Table 1. Regulatory Categories of FDI in the Telecom Sector (1995)

Source: Lu & Wong (2003)

When the “Attracting and Absorbing Foreign Direct Investment” policy as applied to the
mobile communications equipment manufacturing sector it led to the emergence of foreign direct
investment in mobile handset production in the early 1990s. In 1992, Motorola built its first
manufacturing plant in the port of Tianjin. Now nearly all the world famous mobile
communications equipment providers, including Motorola, Ericsson, Nokia, Siemens, and
Samsung, have established joint venture companies in China. Motorola, Nokia and Ericsson are
the three largest. The total foreign investment in this sector was $1.9 billion in 1998 and over $4

China's Mobile Handsets FINAL DRAFT 2006.sph ERSA2006 Greece

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